Doing Business in Russia: The Importance of Employee Preparation and Support

By Kenneth M. Burgess, and David A. Sharar
5/19/2014

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Russia is one the world’s top emerging markets, and, when compensating for price differences, its economy ranks sixth in the world. It also happens to be one of the most difficult places to do business. According to the World Bank’s Doing Business 2013 ranking, which compares 185 countries by business climate, Russia claimed the 112th spot. According to the Moscow News, Russia is one of the four most difficult locations for expatriates (ranking with Saudi Arabia, India and Qatar).

From business practices to general cultural trends, Russia is a country in transition. There are inevitable tensions when one system is replaced by another. Overarching business culture and personal behaviors are forced to adapt, as both are informed by deeply entrenched mores and perspectives—some of which run counter to norms outside of the Russian “framework.”

This transition has been a challenging and ongoing cultural process; the Russian approach to identifying, managing and solving problems is often quite different from a Western approach. The impact of this shift can be seen in everything from motivating employees in the workplace, to the function of teamwork, and to the seemingly incongruent ideals of contributing to a corporate objective while also taking ownership of individual outcomes.

Expatriates in Russia

Expatriates adjusting to life in Russia face a number of challenges. A successful deployment will hinge on many factors, from how well the expat can adjust to a vastly different society to how well he or she can navigate a workforce made up of Russian natives who don’t automatically respond to a Western style of management. U.S. companies doing business in Russia need to understand Russian society and business culture, and take advantage of a culturally-attuned employee assistance program (EAP) that can be integral in supporting a graceful transition for the expat and his/her family. Employer-sponsored EAPs provide professional support and counseling to help employees and dependents with work, personal and behavioral health concerns such as marital, family, emotional, stress, drug and alcohol, legal and financial problems. Organizations with effectively implemented EAPs should eventually see reduced absenteeism, decreased medical and disability claims, fewer disciplinary problems and enhanced productivity.

Even with sufficient preparation, an American business person transported to Russia will be in for major culture shock upon arrival. First, Russia’s Eastern European/Euro-Asian cultural heritage is very different. Reading the country’s history, you’ll learn that life in Russia has not been easy. Russians are survivors because they’ve had to be. The twentieth century collected a toll of millions of casualties due to war, revolution, starvation, poverty and terror. Into the 1990s, Russians stood in long lines for simple things like meat and bread. Russian culture reflects this history, and expatriate managers soon learn that Russians view “cunning and connectedness” with great respect. It’s not a location for the faint of heart.

Getting Around ... and Getting Along

Apart from finding basic resources—and reliable sources for these resources, there are four basic aspects of day-to-day life in Russia that expats need to understand and address: daily travel (or just “getting around”), language, routine personal interactions and general safety.

Moscow, the capital, is huge, with a population of 12 million and covering 1,000 square miles. Getting around the city is difficult, particularly in winter. And winter lasts more than six months. Moscow is also busy and fast-paced. Expats should be aware that Muscovites can be rude about their personal space on crowded sidewalks, streets, or subways. Standing in the way may get you pushed aside, sometimes roughly. And don’t expect an “excuse me,” either.

Westerners find the language challenging. The Russian alphabet, Cyrillic, like the Greek, adds considerably to its difficulty. Most Russians do not speak English. For many years the country was closed to Westerners, particularly to those from the United States. You’ll find street signs and most directions (and maps) presented only in Russian. Studying the language prior to arrival helps. But Russians acknowledge that their language is difficult, and they’re impressed by those attempting to learn it. They’re also forgiving of those making even a modest effort at communicating. Being familiar with the alphabet and knowing some words and simple phrases is a good plan. To do business, though, it’s important to learn as much of the language as possible and to employ the services of a trusted interpreter.

While most Americans know Los Angeles traffic is bad, Moscow beats it. It’s hard to move around the city by automobile and often impossible to find a parking space. Expatriate websites recommend that Westerners refrain from driving. Personal drivers are the norm for expats (and the Russian wealthy), but if the expat’s budget doesn’t allow for a driver, you’ll need to learn to use the Metro system. It’s the best way to move about, but it takes time to learn—particularly as the maps are in Russian.

Safety is an important concern. Moscow is not the world’s most dangerous city, but it’s wise to exercise caution. Some Americans have problems, but we often learn that they made a foolish decision. For example, walking through a street underpass at night is unsafe. Successful travelers learn what things to avoid and plan for a cab (or driver) when going out for the evening. Going alone to certain areas of the city, particularly at night, is not a good idea. It’s always best to plan ahead. For males, there are other issues. While not easy to discuss, one such is prostitution. You’ll find discussion of prostitution on most of the Russian expatriate websites and blogs. The fact is, over time men can expect to be approached by a prostitute. Sexually transmitted diseases are on the rise, particularly in the larger cities.

There are other day-to-day challenges to expect as well, like shopping, banking or simply trying to locate a business address. One must expect to be challenged in this city, and it’s always wise to allow for extra time.

For the new arrival, Russians may seem unfriendly as they don’t generally speak to strangers, particularly while walking, and eye contact is rare. But after one gets to know Russians, either through work or other activities, it’s a different story. Acquaintances soon become friends, and Russians are eager to help expatriates with their Russian or to practice English with them. An invitation to a Russian home is usually warm and hospitable.

Pre-Departure Preparation and In-Country Support

In the past, expatriates were sent to international locations to run the location. Today, because localization is so crucial to local market development, more people are sent abroad to find, train and mentor replacements and to transfer business knowledge. Assignments are getting shorter: six-month to-two-year assignments vs. the three-year assignments of the past.

The locations are also changing. While most went to London, Paris, Geneva, or Melbourne just a few years ago, today employees are being assigned to more challenging locations like Moscow or other cities in Russia, or to remote locations like Almaty, Kazakhstan, Ulaanbaatar, Mongolia, or worksites in Saudi Arabia, Brazil or China. Many of these locations are very challenging, and some dangerous. Today, employees are sent abroad without their families in tow. Westerners have a history of high assignment failure, particularly those from the U.S. The fact is that any expatriate assignment is challenging.

A few issues that often lead to failure:

A misdirected selection process. The most common mistake here is in selecting an employee who may have the technical skills, but lacks the appropriate human relations skills. Put simply, you should not send employees overseas simply because they’re good engineers.

Failure to provide adequate and appropriate cross-cultural training. Cross-cultural understanding is important. Successful companies pay attention to technical skills, but also recognize the importance of and pay attention to one’s ability to adjust to a new environment, a willingness to accept and consciously learn about a new culture, and the skills to become a skillful ambassador. It’s also necessary to involve the spouse in cross-cultural preparation.

Failure to realize that spousal/family issues are important to acknowledge and understand.

Living abroad is difficult for the employee, but difficult, too for the spouse and children. The spouse may have given up a career to accommodate the company’s decision to move the family abroad. Employees can retreat to the office, but family members tend to face difficulties alone. Failing to address these issues can result in family stress, the most frequent reason for assignment failure.

Conduct a Pre-Departure Assessment

Expatriation is a process that begins with candidate selection and ends when the individual and his or her family has returned home, or repatriation. An initial telephone interview should be set up with the employee and spouse and seasoned mental health professionals. Held in confidence, this is really an “assessment” interview, enabling the professional to better understand the individual and family, to gain some insight into their relationship, and to see just where each is with respect to the upcoming move. This call also helps the professional to see if there are any special needs, issues to be addressed, or services required over and above the more typical destination services package.

Examples include the need for any special education services, family issues such as an ill family member, or medical/mental health concerns. Having such issues managed or in-process prior to arrival in-country helps to lower any anxiety the individual or family may have. A jointly agreed follow-up plan can then be put in place.

Ongoing Support

Upon arrival in the host country, employees and their families need time to get acclimated. “Hitting the ground running” is not a good way to start out and can get an assignment off badly. Two-weeks are generally recommended to settle in. Expatriates moving to Russia typically work for large corporations with familiar Western-style EAPs. However, while expatriates understand what an EAP does, they might not know the full extent and specialization of EAP services required to facilitate their transition and acclimation to another culture and another country—from navigating transportation to securing education to establishing financial/banking needs—especially in Russia. In sum, a culturally-attuned EAP can be the difference between a failed and costly assignment, and a successful one.

Kenneth M. Burgess and David A. Sharar are managing directors for Chestnut Global Partners, a provider of international employee assistance/well-being, expatriate support, and crisis intervention abroad in over 120 countries.

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